I dunno... I've never really looked at KSMAS or its code.
MyBB's "static" avatar feature already uses quite a bit of bandwidth... letting everyone upload sets of images for dynamic avatars would probably be worse...
IMO, it's best for avatars to be on other servers. Does KSMAS support having the script on one server and the images on another? For example, the script I wrote for Choli's avatar...
http://shoutbox.menthix.net/images/member/choli.php
It simply redirects to a random image on usuarios.lycos.es.